Recent Changes in PPF Rules: PPF Scheme, 2020

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GOI has notified new PPF rules which have replaced the PPF scheme 1968 with PPF scheme,2020. 



Key takeaways from the recent changes in PPF rules:-

πŸ‘‰Earlier deposits to the PPF account were made in the multiples of 5 and a maximum of 12 installments could be made, now deposits are to be made in the multiple of 50 and deposits can be made for n number of times.

πŸ‘‰Even after maturity PPF account can still be maintained without having to make any further deposit and the balance shall continue to earn interest at the earliest mentioned rates. If a holder chooses this option they can make one withdrawal every financial year.

πŸ‘‰A person can have a maximum of 2 accounts, one on his own behalf and 1 on the behalf of a minor child or as a guardian.

πŸ‘‰After 15 years, PPF can be extended with a deposit within 1 year of such maturity or by filling up FORM 4 instead of FORM H used earlier.

πŸ‘‰For opening a PPF account FORM 1 is to be filled up instead of FORM A

πŸ‘‰THE yearly PPF deposit limit still remains at ₹ 1.5 lakhs.

πŸ‘‰Earlier premature withdrawals were not allowed and if they were, only in the situation of an emergency, but now the amount can be withdrawn after 5 years of investment.

πŸ‘‰The interest rate of loans against PPF has been reduced from 2% on such loans up to and above the prevailing PPF interest rate. However, now, this has been reduced to 1%.

πŸ‘‰In case of death of the account holder, the nominee or legal heir shall be liable to pay interest on the loan availed by the account holder but not repaid before his death. Such an amount of due interest shall be adjusted at the time of the final closure of the account.

πŸ‘‰In case of change of one's residential status, PPF can be closed prematurely but not before 5 years of the opening of the account also the investor has to suffer from a reduction in interest rate by 1%.

πŸ‘‰In case of any financial default, PPF can be withdrawn and used as an emergency fund.

πŸ‘‰PPF can be revived during the maturity period with payment of ₹ 50 and ₹ 500 arrears for each year of default in making the deposit to the PPF account.

πŸ‘‰If you have opened a PPF account in a post office, you can now deposit a post office savings account cheque of any amount in your account at any non-home post office branch. Earlier it had to be the same brach and the amount of cheque was a maximum of ₹ 25000.
 
- Articulated By Divya Pansari

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